External Auditor First to Confirm Tether’s USDT Backing

Nivesh Rustgi

Mar. 30, 2021

Tether releases independent attestation report of its reserves.

External Auditor First to Confirm Tether’s USDT Backing

Shutterstock cover by echoevg

Key Takeaways

Accounting firm Moore Cayman attested "assets and liabilities" report from Tether in February.
As of Feb. 28, Tether held more than 100% assets to back the issuance of fiat and commodity backed stablecoins.
The report strengthened crypto market sentiments by removing risks of non-liquid reserves of USDT.

Independent auditor Moore Cayman attested last month that Tether is backed by “cash and cash equivalents” of more than 100% of its liabilities.

Tether Removes Bitcoin Market Risk

According to Moore’s report, Tethers’ assets as of Feb. 28 were worth $35.2 billion while liabilities in digital stablecoin issuance were $35.1 billion.

Tether settled its case against the New York State Office of the Attorney General (NYAG) for misappropriation of funds and probing into assets backing the stablecoins issued by Tether. The NYAG failed to provide any substantial evidence to back its claims.

The settlement terms require more transparency from the firm with a comprehensive quarterly report and separate reporting to the NYAG.

Before the settlement, there was a prevailing fear among crypto investors about Tether reserves having inadequate liquidity to back the USDT supply. Tether has also launched euro, yuan, and gold-backed stablecoins.

Moore Cayman’s report further eradicates any such fear as USDT attains a similar status quo to U.S. regulated stablecoins by Circle (USDC) and Paxos (PAX).

The language used by the Cayman Island-based accounting firm echoes with USDC and PAX’s attestations by auditors in the past. Grant Thornton attested USDC in July 2019.

Notably, a comprehensive audit report—addressing the composition and risks of the holdings—has not been published by any stablecoin issuer.

Thus, the specific assets held by Tether, Circle, or Paxos are not yet known, except that they are “cash or cash equivalents.”

Presently, the USDT stablecoin supply is $40.8 billion with a 24-hour trading volume of close to $100 million.

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